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From the Bookshelf
Book Review: Convergenomicsby Katherine M. Chudoba, Utah State University In an era of rapid technological development that facilitates new ways to communicate and collaborate, it is not uncommon for authors to try to make sense of how work is changing. Friedman's The World is Flat looked at the flattening global economy and how this is being enabled by workers around the world collaborating across supply chains. In Wikinomics, Tapscott and Williams examined how the nature of collaboration has changed as people engage in open source development and use Web 2.0 technologies to work together. The latest in this literary genre is Convergenomics. Sang Lee and David Olson identify 10 megatrends that describe how organizations and people work: globalization, digitization, changing demographics, changing industry mix, deregulation and privatization, commoditization of processes, new value chains, emerging new economics, deteriorating environment, and cultural conflicts. They posit that together, these trends form a "convergence revolution" that offers a wealth of opportunities and challenges for innovation. It is incumbent on organizational members to understand these trends and develop strategies to take advantage of them in order to succeed in today's marketplace.
Chapter 3 provides the overarching structure for Lee and Olson's thesis in which they differentiate between evolutionary and revolutionary convergence. Figure 3.1, Evolution of Business Environment, Strategies, and Convergence, provides a succinct conceptualization that illustrates how multiple factors are layered and suggests that we are indeed in a time of revolutionary convergence. The first two layers, industry development and economic structure, illustrate that much of human history can be characterized as evolutionary convergence, with changes from an agricultural to an industrial society, and from a national to a regional economy, taking us to the middle of the 20th century. They argue that since then, the rate of change has increased and show what many others have argued, that the 21st century is characterized by a knowledge service industry that operates in a global economy. The authors begin to add value to this foundation by explaining how the source of competitive advantage has evolved from economies of scale through economies of scope and expertise to today's economies of convergence that take advantage of the changes across domains. They also argue that the primary focus of innovation has changed from a heavy emphasis on exploitation of existing competencies to an emphasis on exploration of new competencies. These changes, exemplified by the 10 megatrends, present both challenges and opportunities.
As an MIS professor with an interest in Operations Management, several chapters were especially interesting. Chapter 8, Information Technology Supporting Convergence, looks at the topics of supply chain convergence and technology equality. The chapter begins with a brief overview of value chains in a global context that includes the principles of adaptation or maximizing local relevance, aggregation to a globally consistent organizational strategy, and arbitrage by leveraging regional differences and local competitive advantages. The authors draw on examples from companies like Procter & Gamble, Nike, and Apple Computer to illustrate how to develop a cohesive global strategy by leveraging local competitive advantages in value chain alliances. For example, Procter & Gamble focuses on its strength in product development and outsources manufacturing to other organizations because manufacturing is not a source of competitive advantage for them. Convergence occurs because of the need for shared data and coordination, usually achieved through shared software systems. At the same time, a period of technology equality has emerged as countries in Southeast Asia have grown into technological powerhouses, leading to a relatively level competitive environment across the globe. In a time of technology equality, competitive advantage "will come not from using the technology to do the conventional business functions, but rather from creating and selling new knowledge and ideas . . . [opening] doors of possibilities of accomplishing things never dreamt of before. (p. 113)" Chapter 9, Innovation through Open Systems, examines open Internet systems, service-oriented architecture (SOA), enterprise information systems (EIS), convergence, and Web 2.0 business models by both explaining the history of each type of innovation and discussing how organizations can take advantage of them. For example, service-oriented architecture is described as a "design approach for technology convergence" (p. 127) that unifies business processes by structuring large applications as an ad hoc collection of smaller modules called services. The loosely coupled design provides a standardized architecture that reduces service development life cycles and increases flexibility. The authors continue by suggesting how organizations can use SOA to innovate and react to changes quickly. For example, different business partners in a value chain can be dynamically added or removed, and information systems can be updated much more quickly than by using other technologies. Other examples from practice are included to support their recommendation such as IBM's On Demand Business, Hewlett-Packard's Adaptive Enterprise, and Dell's blade computing. Highlights from some of the other chapters include the following:
The authors' ideas are intriguing. I agree with their central thesis that economic, political, social, business, and technology systems are changing rapidly and being increasingly integrated in ways that could not have been anticipated even a few short years ago. Further, successful organizations must be poised to take advantage of this new and somewhat uncertain environment. Still, the authors left me wanting more. Sometimes the book reads as a mash-up of ideas that are mentioned almost superficially. Many examples in support of their thesis would have benefited from drilling down and providing a more comprehensive set of arguments. Some issues were only examined on a superficial level. For example, the chapter on industry convergence was a brief nine pages, with not nearly enough detail to fully illustrate that the extent and speed of industrial convergence is revolutionary and not evolutionary. One suggestion that would have helped the authors convey their ideas more effectively is the use of a consistent organizing principle throughout the book. While ideas are repeated within and across chapters, the overarching logic underlying the titles of Chapters 4-10 and the selection of topics covered in them is not always clear. There are several ways the authors could have addressed this. One would have been to devote a chapter to each of the 10 megatrends identified in Chapter 2 and then write a concluding chapter that synthesized these trends to demonstrate how they are converging to create a new way of working. I am glad the authors resisted this temptation because it could have shortchanged attention given to their central thesis that multiple factors are converging to create the equivalent of a new economic world order. A better solution would have been to use the ideas synthesized in Figure 3.1. Subsequent chapters could have been devoted to an examination of changes in industry development, economic structure, sources of competitive advantage, and primary innovation focus, drawing on the 10 megatrends to illustrate each topic. The final chapter could have synthesized these ideas into an expanded discussion of the convergence revolution. Instead, the final chapter offers a confusing conclusion. It is titled, "Convergence Evolution" rather than the expected "Convergence Revolution." In addition, figures and tables use a mixture of issues raised in Chapter 3 and issues associated with a subset of the chapters. This organizing scheme is not applied consistently, however, so it is not clear why some topics and chapters are included and others excluded. Despite this shortcoming, Convergenomics is a worthwhile addition to the library of anyone interested in how organizations can develop innovative strategies to take advantage of the confluence of political, economic, and technological trends in the 21st century. Both academics and practitioners will gain a deeper appreciation of the relationships and reciprocal influence between these trends after reading Lee and Olson's book.
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The authors are accomplished scholars and bring their extensive understanding of industry to an examination of the global business environment. Both Lee and Olson have published a prodigious number of articles and books, and have been recognized by organizations such as the Academy of Management and Decision Sciences Institute for their contributions to theory and practice. James Clifton, chairman and CEO of The Gallup Organization notes in the forward: